EU E-Signature Regulation Takes Effect July 1

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May 20 — An EU regulation that aims to make it easier for citizens to interact with government agencies online and to conduct business across borders will take effect July 1.

The European Union hopes the regulation will move online, government services that normally require an in-person visit. It also wants to create a private marketplace of what it calls trusted third parties, companies that would sell services to identify users, secure transactions online and prevent fraud.

The regulation has two components. It makes electronic identification (e-IDs) cards and e-ID numbers interchangeable throughout the EU, and it creates a private-sector market for so-called “trust services” online.

“The idea is that I, as a Belgian citizen, could use my e-ID if, for example, I moved to Germany to authenticate myself online to obtain medical care or engage in other interactions with the government,” Bastiaan Bruyndonckx, Counsel at Linklaters LLP in Brussels, told Bloomberg BNA May 20. “The second part—which is interesting for companies—deals with trust services, e-mails, registered letters, etc. These are services to be offered by private companies.”

Companies operating in this space include DocuSign Inc., IdenTrust Inc. and Verizon Communications Inc., among others.

E-IDs should make it possible to allow citizens from one EU country to conduct business in another online without having to send in notarized documents or copies of national ID cards or passports, Bruyndonckx said.

The EU hopes the private sector component will make it easier for EU citizens to open bank accounts, establish insurance policies, submit tax returns, age verification and verify age online.

Some 180 companies have already registered themselves as trust providers, according to an EU list.

Aims to Improve on Past Directive

The fact that the EU chose to make its e-ID this legislation a regulation rather than a directive means it will be uniform throughout the member states, Bruyndonckx said.

“With the previous directives on e-signatures, the systems never worked. If you look at the situation in Belgium, for example, there are few companies that offer qualified e-signatures which comply with the directive passed in 1999,” Bruyndonckx said.

Michael McKee, a partner at DLA Piper UK LLP in London, agreed that the regulation will “lead to a pan-European outcome,” though he said it wasn't clear how large the market is for trust services.

“The regulation is trying to strike the balance,” McKee told Bloomberg BNA May 19. “That's why, for example, it has different requirements around different signatures.”

The EU based its model on Estonia, a European Commission official involved with the project said.

“In Estonia, you can do nearly everything digitally, and electronic ID is what speaks for you when you deal with both the government and the private sector,” the official told Bloomberg BNA May 19, asking that his name not be used. “But in this regulation, the obligation is only of the public sector.”

But an implicit aim of the project is for the government to create market demand for e-IDs, he said.

“What is envisaged—and clearly stated—is that the Commission is encouraging member states to open up their infrastructure to the private sector, both in terms of provisioning private serves as well as on consuming and relying on e-ID means,” the official said.

No Connection With U.S

The European Commission official noted that non-EU providers can have their “trust services” recognized in Europe. He said Verizon has already gained authorization in the U.K., for example.

“For their services to be recognized as equivalent, these service providers will have to undergo certifications in an EU country or be based in a country that the EU viewed as equivalent through an international agreement,” he said.

The EU is open to creating a U.S.-EU common standard on e-IDs, much as exists for passports or other forms of ID, but this is not being discussed as part of the on-going Transatlantic Trade and Investment Partnership talks, he said.

“Certainly there is an interest in both the U.S. and the EU in creating interoperability, but the EU is more advanced here,” he said. “There isn't a firm commitment from either of the parties to table a request to negotiate a treaty at this moment in time.”

The official said 25 member states have in place or are building e-ID tech infrastructure, while three states (Romania, Hungary, Cyprus) are still in the planning stages.

It's unclear, the official said, if government agencies in Romania, Hungary and Cyprus will create their own e-ID infrastructure—like France and Germany did—or allow private companies to manage this piece for the government, as occurred in the U.K.

The European Commission official said the regulation will require cooperation between the member countries, though he expected every EU country to move forward at different speeds.

“Having 25 countries working on this looks positive, and it's an important milestone, but rolling out these schemes might follow different paces,” he said.

To contact the reporter on this story: Michael Scaturro in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Joseph Wright at jwright@bna.com

For More Information

Text of EU electronic identification and trust services regulation is available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2014.257.01.0073.01.ENG

EU Commission site on trust services and eID is available at https://ec.europa.eu/digital-single-market/en/trust-services-and-eid

Slides from EU stakeholder event are available at https://ec.europa.eu/digital-single-market/en/news/new-date-eidas-stakeholder-event-eid-emerging-business-cases-boosting-uptake

List of trust service providers in the EU is available at https://ec.europa.eu/digital-single-market/en/eu-trusted-lists-certification-service-providers